RAMS offer sees shares on the rise
The conditional proposal values the target, known as RHG Mortgage Corporation, at about $130 million. The offer saw RHG shares surge 9.5per cent to 41¢. Resimac made an approach to buy RHG's loan book earlier this year, but that bid failed because the price was too low.
Under the latest proposal, Resimac and Australian Mortgage Acquisition Company [AMAC], an entity formed by Mr Loewensohn, are offering 41.5¢ a share for RHG plus 1.5¢ a share in franking credits.
RHG's main asset is the lending book of RAMS, which was a key competitor against the big banks before the global financial crisis.
In 2007, the RAMS branch network and brand was sold to Westpac for $140 million as the early tremors of the US subprime crisis were being felt on funding markets.
RHG is now running down its mortgage book but not making any new loans. It made a $40.7 million profit in 2012. RHG said in a statement that its directors were assessing the proposal and would update the market when appropriate.
Frequently Asked Questions about this Article…
Non-bank lender Resimac, together with Australian Mortgage Acquisition Company (AMAC) led by Trevor Loewensohn, made a conditional proposal to buy RHG Mortgage Corporation (the remnants of RAMS) valuing the company at about $130 million. The bid attracted attention because RHG shares jumped 9.5% on the announcement.
Under the proposal Resimac and AMAC are offering 41.5 cents a share for RHG plus 1.5 cents a share in franking credits, according to the article.
The offer saw RHG shares surge 9.5% to 41 cents, reflecting investor interest after the bid was announced.
RHG’s main asset is the lending book from RAMS. That loan book is central to the proposal because Resimac previously tried to buy RHG’s loan book earlier in the year, and the RAMS lending book is the primary value RHG still holds.
Yes. Resimac made an earlier approach to buy RHG’s loan book earlier in the year, but that bid failed because the price was considered too low.
RAMS was a major non-bank mortgage competitor before the global financial crisis. In 2007, RAMS’ branch network and brand were sold to Westpac for $140 million as funding markets began to be affected by the US subprime crisis.
RHG is currently running down its mortgage book and is not making any new loans. The company reported a $40.7 million profit in 2012.
RHG said its directors were assessing the proposal and would update the market when appropriate. Shareholders can expect further announcements from the company once the directors have completed their assessment.
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